What is a real estate purchase agreement and what should it include?

@juston 

A real estate purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions of the sale of a property. It contains various details about the transaction and serves as a guide to ensure that both parties are protected and informed. Here are the key elements that should be included in a real estate purchase agreement:

1. Identification of Parties: The agreement must clearly state the full legal names and contact information of both the buyer and seller.
2. Property Details: The agreement should include a clear description of the property being sold, including its address, boundaries, and any fixtures or appliances included in the sale.
3. Purchase Price: The agreed-upon purchase price of the property should be clearly stated in the agreement, along with the currency and payment terms.
4. Earnest Money Deposit: This section specifies the amount of earnest money deposit (a sum of money that shows the buyer's serious intent to purchase the property) and the conditions under which it may be refunded or forfeited.
5. Financing Details: If the buyer intends to finance the purchase, the agreement should outline the financing terms, including the type of loan, interest rate, down payment amount, and any contingencies related to obtaining the loan.
6. Contingencies: These are specific conditions that must be met for the sale to proceed, such as obtaining satisfactory inspection reports, appraisal results, or mortgage loan approval. If any contingencies cannot be met, the parties may agree to terminate the agreement.
7. Closing and Possession Dates: The dates for the closing (transfer of ownership) and possession of the property should be clearly stated.
8. Disclosures: The seller must disclose any known defects, liens, or encumbrances on the property. Any warranties or guarantees should also be mentioned.
9. Title and Closing: The agreement should specify how the title will be transferred and who will handle the closing process. It may also address who will pay for various closing costs like title insurance, attorney fees, and transfer taxes.
10. Default and Remedies: This section outlines the consequences if either party fails to fulfill their obligations under the agreement, including potential legal remedies.
11. Governing Law: The agreement should state the laws of the jurisdiction that will govern the interpretation and enforcement of the contract.

It is important to note that these elements may vary depending on the specific jurisdiction and specific terms agreed upon by the buyer and seller. It is advisable to consult a qualified real estate attorney when drafting or reviewing a real estate purchase agreement to ensure compliance with local laws and proper protection of both parties.